What is the Affordable Care Act?
The Patient Protection and Affordable Care Act (PPACA) 2010 HR3590, or Affordable Care Act (ACA), is the new health care reform law recently implemented in America and is often called by its nick-name “Obamacare.” The PPACA is made up of the Affordable Health Care for America Act, the Patient Protection Act, and the health care related sections of the the Health Care and Education Reconciliation Act and the Student Aid and Fiscal Responsibility Act. It also includes amendments to other laws like the Food, Drug and Cosmetics Act and the Health and Public Services Act.
Will the Affordable Care Act Affect Our Internship Program?
ACA Employer Mandate (Paid Interns)
For plan years beginning on or after January 1, 2014, the ACA requires employers to offer minimum essential health insurance coverage to at least 95% of its paid, full-time employees or be subject to a penalty. As defined by the ACA, a full-time employee is any employee who works 30 hours or more per week. As an example, if the County employees 18,000 full-time employees and does not comply with the law, the County will incur a $2,000 penalty per employee for each full-time employee (less 30) which equates to approximately a $35,940,000 penalty. As such, it is imperative that County departments offer the minimum essential health insurance coverage to any paid interns who work 30 hours or more per week.
ACA Individual Mandate (Un-paid Interns)
The ACA also requires all U.S. citizens and legal residents to have minimum essential health insurance coverage effective January 1, 2014. An individual is considered to have minimum essential health coverage for any month in which he or she is enrolled in one of the following types of plans for at least one day:
- An employer group health plan
- An individual health insurance policy
- A government plan such as Medicare or Medicaid
Un-paid interns who are already covered by an employer group health plan (either through a parent/guardian (until 26 years old) or school) or government plan will not be required to purchase additional coverage. If not already covered by a qualifying employer group health plan or government plan, students will be required to purchase minimum essential health insurance coverage on their own by March 31, 2014 for a January 1, 2014 effective date, or be subject to a penalty. Currently, the 2014 penalty is the greater of $95 per adult or 1% of income over the tax-filing threshold, which will increase for future years. However, there are several exemptions for which students may apply to avoid paying penalties if they do not purchase coverage.